The Securities and Exchange Commission announced this week that they have charged a former investment bank analyst with J.P. Morgan, with illegally tipping his close friend with confidential information about clients involved in impending mergers and acquisitions of technology companies. The SEC also charged his friend and another individual with trading on the inside information.
The SEC alleges that on two separate occasions, one in 2012 and another in 2013, the former investment bank analyst, Ashish Aggarwal, became aware of sensitive, nonpublic information about two acquisition deals from colleagues who were working on them. Aggarwal then tipped his friend and colleague, Shahriyar Bolandian, who traded on the basis of the illegal tips in his own accounts as well as accounts belonging to his father and sister. Bolandian also tipped his friend Kevan Sadigh. Bolandian worked at Sadigh’s e-commerce company, and together they made more than $672,000 in combined profits from the insider trading. The SEC Enforcement Division’s Market Abuse Unit detected the insider trading through trading data analysis tools in its Analysis and Detection Center. Aggarwal had repeatedly communicated with Bolandian, in the days and weeks leading up to public announcements concerning the mergers and acquisitions of the technology companies. Bolandian and Sadigh then purchased the same series of call options in the companies, their trades often executed within hours or even minutes of each other, and typically were 100 percent of the daily trading volume of those option series.
Robert A. Cohen, Acting Co-Chief of the SEC Enforcement Division’s Market Abuse Unit, commented, “We will continue to proactively identify and combat serial insider trading schemes, particularly when it involves industry professionals.” In a parallel action, the U.S. Department of Justice also announced criminal charges against Aggarwal, Bolandian and Sadigh, on August 25, 2015.
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